Disney also agreed to pay as much as $450 million more if
Maker Studios meets “strong” performance targets, the Burbank,
California-based company said today in a statement. That could
boost the total to $950 million.

With Maker Studios, Disney is following DreamWorks
Animation SKG Inc. into an online video business with expanding
audiences and little profit. DreamWorks Animation, producer of
the “Shrek” movies, bought AwesomenessTV, a smaller competitor
of Maker Studios, for $33 million plus as much as $117 million
in incentives last year. The online outlets could help media
companies build awareness for films and TV shows.

“Short-form online video is growing at an astonishing pace
and with Maker Studios, Disney will now be at the center of this
dynamic industry with an unmatched combination of advanced
technology and programming expertise and capabilities,” Robert
A. Iger, Disney’s chairman and chief executive officer, said in
the statement.

With more than 55,000 channels, 380 million subscribers and
5.5 billion views a month on Google Inc.’s YouTube, Culver City,
California-based Maker has established itself as one of the top
online video networks for young audiences, Disney said.

Buying Again

“There is a lot of good happening in digital video
networks,” Mike Vorhaus, a technology consultant at Magid
Advisors, said in an interview. “There are a ton of eyeballs
and the content isn’t expensive to produce. There just hasn’t
been a lot of meaningful profit yet.”

The acquisition is one of the biggest for Disney, the
world’s largest entertainment company, since the $4 billion
purchase of Lucasfilm Ltd. in 2012. In the online space, Maker
could potentially exceed the $563.2 million Disney spent in 2010
on mobile game maker Playdom. Disney paid $350 million in 2007
for Club Penguin online world.

Disney rose 0.4 percent to $79.84 in extended trading at
7:53 p.m. New York time after the deal was announced. The stock
fell 1.1 percent to $79.49 at the close and has gained 4 percent
this year.

Maker Studios will report to Jay Rasulo, Disney’s chief
financial officer, according to the statement. The online
company was founded in 2009, according to a regulatory filing.

Disney had $4.4 billion in cash at the end of September,
according to regulatory filings.